Biden claims oil companies are ‘war profiteers’ as he levies windfall taxes

US President Joe Biden accused oil companies of “profiting” from Russia’s invasion of Ukraine when he threatened them with legislation imposing a windfall tax if they don’t increase production.

His comments come days after oil and gas Manufacturers, including ExxonMobil and Chevron, reported huge gains about a week before the crucial midterm elections, where gas prices have put Democrats on the defensive.

“In wartime, any company receiving such historic windfall gains has a responsibility to act beyond the narrow self-interest of its executives and shareholders,” Biden said Monday night.

“They have an opportunity to lower prices for consumers at the pump. If they don’t, they will pay higher tax on their excess profits and face other restrictions.”

This is reported by Exxon, the largest US oil company Record quarterly profit of nearly $20 billion on Friday. Rival Chevron earned $11.2 billion, just below record earnings from the previous quarter.

“Their gains are a boon of war – a boon of the brutal conflict that is ravaging Ukraine and injuring tens of millions around the world,” Biden said.

The president said his administration will work with Congress to formulate possible policy responses. “It’s time for these corporations to stop war profiteers, live up to their responsibilities in this country, give the American people a break and still do very well.”

Biden has repeatedly urged producers to use their profits to invest in increasing production. But Wall Street has been urging oil companies to pay cash to shareholders instead.

US gasoline prices hit a record high of more than $5 a gallon this summer. They’ve fallen since then, but remain more than 60 percent higher than when Biden took office given robust oil consumption and global supply shortages.

High prices at the pump have become a political burden for Democrats ahead of next week midterm electionswhere the President’s party risks losing control of both houses of Congress.

Any legislation imposing new taxes on the oil industry faces little chance, especially in a tightly divided Senate. Democratic lawmakers have previously floated the idea of ​​a windfall tax on oil company profits, an idea coldly received by the oil industry.

The American Petroleum Institute lobby group called the president’s remarks “campaign rhetoric” and said tax hikes could backfire.

“Oil companies don’t set prices; global commodity markets do,” said Mike Sommers, executive director of the American Petroleum Institute. “Increased taxes on American energy are discouraging investment in new production, which is just the opposite of what is needed.”

Exxon CEO Darren Woods said Friday: “There has been a debate in the US about our industry giving back a portion of our profits directly to the American people. That’s exactly what we do in the form of our quarterly dividend.”

The government has taken steps to lower fuel prices, including record releases from the US Strategic Petroleum Reserve. Biden said a plan to replenish the reserve at a price of $67 to $72 a barrel would create a floor for prices and give oil companies confidence to drill more.